We will live up to responsibilities

CHRISTY Kearney’s article (May 10) on the role of audit in the banking crisis contains a number of significant omissions.

Existing auditing standards, set independently of the auditing profession, do prohibit auditors undertaking work that puts them in a position where they have to audit their own work. These standards also contain significant safeguards to auditor independence, including prohibition on financial interests and business relationships, and restrictions on auditors and their staff joining audit clients. The imminent transposition in Ireland of the EU Statutory Audit Directive will provide statutory underpinning to all of these existing requirements.

Nonetheless, Mr Kearney is right to consider whether better structures can be put in place for the future. Such sentiments were expressed recently by the Taoiseach in his address to the Annual Conference of Chartered Accountants Ireland on May 6. Two issues in particular referenced by the Taoiseach were the current Recommendation from Europe of the Quality Assurance of auditors of Public Interest Auditors and the promised Green Paper from the European Commission on the future role of statutory audit and the regulation thereof. The Minister for Enterprise is considering a consultation carried out on the issue of independent inspections of public interest entity auditors late last year. While we noted concerns at that time around the costs of a state inspection mechanism, Chartered Accountants Ireland will respond to any ministerial proposals in a constructive fashion. We do, however, have confidence in the efficacy of the inspection of audit firms that is carried out by our autonomous regulatory board , CARB.